Break-even ROAS Calculator
Enter your margin after all variable costs to find the lowest ROAS at which your ads pay for themselves.
Use Break-even ROAS Calculator
Fixed costs such as rent, salaries and tools are not included, so breaking even here leaves them unpaid. Free, no sign-up. Runs in your browser; nothing you enter is uploaded.
How to use it
Ad revenue is not profit. Find the ROAS your ads need to cover their cost after product, shipping, payment and return costs. Enter your margin, not your markup.
- Subtract all variable costs from order revenue, divide by revenue and multiply by 100.
- Enter that as Gross margin: 57.5 for 57.5%. Leave ad spend out.
- Compare the result with your actual ROAS. Below it, ads lose money.
Formula
Break-even ROAS = 100 ÷ gross margin %
Ads break even when revenue × (gross margin ÷ 100) = ad spend
Gross margin means revenue minus every variable order cost, before ads
Example
Skincare kit, India · ₹
A D2C skincare brand counting shipping, payment fees and returns, not just product cost.
- Gross margin
- 57.5%
Questions
What is break-even ROAS?
It is the return on ad spend at which the contribution from ad-driven sales equals ad spend. Below it, ads lose money; above it, they contribute towards fixed costs and profit. It does not mean the whole business breaks even.
What is the break-even ROAS formula?
Divide 100 by your margin percentage, or 1 by the margin as a decimal. At a 40% margin, 1 ÷ 0.40 = 2.50x: each ₹1 or $1 of ads must generate ₹2.50 or $2.50 in revenue.
Which margin should I enter?
Use revenue minus all variable costs—product, shipping, packaging, payment fees and expected returns—as a percentage of revenue, before ad spend. Markup is different: buying for ₹500 and selling for ₹1,000 gives 100% markup but only 50% margin before other costs.
What is a good break-even ROAS?
There is no universal benchmark. Higher margins lower the threshold: 25% needs 4.00x and 50% needs 2.00x. Compare your actual ROAS with your own threshold. Use the Target ROAS Calculator to plan a profit margin on top.
Why is there no result at a 0% margin?
Every sale only covers its variable costs, leaving nothing to repay ad spend. Division by zero has no finite result. A negative margin means every sale loses money before ads, so increasing ROAS cannot fix it.
Does this work for dropshipping?
Yes. Include the supplier price, shipping, payment fees and expected refunds. Enter what remains as a percentage of selling price. At a 10% margin you need 10.00x ROAS just to cover ads; recalculate when supplier prices or return rates change.
Related tools
Turn a product URL into a full ad campaign.
1,000 free credits, no card.